Abstract

This paper examines the first round distributional effects of subsidies to public sector tenants and tax concessions to owner-occupiers in the United Kingdom. Excluding income-related Housing Benefits, the average values per family of the two are found to be of similar magnitude. Local authority rates (property taxes) are found to have provided a roughly equivalent offset to the shortfall from economic rents for local authority tenants and the lack of taxation of owner-occupiers' imputed rents. Their abolition substantially improves the position of housing compared with other forms of consumption or investment.